ABT breaks below key technical support level
Abbott Laboratories (ABT) Technical Analysis Report for Jul 31, 2020 | by Techniquant Editorial Team
Moving lower for the 2nd day in a row, ABT ended the month 10.07% higher at 100.64 after losing $0.89 (-0.88%) today, significantly underperforming the S&P 500 (0.77%). Closing within the previous day's range, prices failed to decisively move beyond the prior day's trading range.
Daily Candlestick Chart (ABT as at Jul 31, 2020):
Friday's trading range has been $2.25 (2.22%), that's slightly above the last trading month's daily average range of $2.14. Things look different on the weekly timeframe, where the market's trading range of the last week has been slightly below the market's average weekly trading range. The longer-term, monthly volatility is currently slightly lower than usual for ABT.
One bullish candlestick pattern matches today's price action, the Bullish Hikkake Pattern.
Prices broke below the key technical support level at 100.71 (now R1), which is likely to act as resistance going forward. The last time this happened on July 24th, ABT actually gained 1.05% on the following trading day. After having been unable to move above 101.58 in the previous session, the market ran into sellers again around the same price level today, missing to move higher than 101.37.
The trend is clearly bullish, showing an intact uptrend in the short, medium and long-term.
Buying might accelerate should prices move above the close-by swing high at 102.89 where further buy stops could get triggered. Selling might speed up should prices move below the nearby swing low at 98.36 where further sell stops could get activated.
Among the six market conditions that our pattern recognition engine identified today, the statistics for the Support/Resistance based market condition "Price broke through Technical Support S1" stand out. Although it is usually interpreted as bearish, it has actually shown to be bullish for Abbott Laboratories. Out of 217 times, ABT closed higher 57.60% of the time on the next trading day after the market condition occurred. The optimal exit for swing trading this condition on the long side has been after 10 trading days, showing a win rate of 63.13% with an average market move of 1.24%.